Pakistan's inflation accelerates to 11.15% in August

Pakistan’s annual consumer inflation accelerated to 11.15% in August, driven largely by higher food and transport costs, while monthly prices rose 1.19%.

The reading was broadly in line with Topline Research’s forecast of 11.09% and marked an increase in inflationary pressures as higher international oil prices pushed up domestic fuel costs.

Food prices rose 13.89% from a year earlier, while transport costs increased 20.17% and communication costs climbed 13.6%, according to the brokerage’s analysis.

On a monthly basis, transport was the largest contributor to inflation, rising 3.41%, followed by food prices, which increased 1.66%.

Transport inflation reflected higher average fuel prices, with motor fuel prices rising 5.61% during August from the previous month. Transport costs were also about 20% higher than a year earlier.

Food inflation was led by sharp increases in the prices of onions, which rose 46% from July, and eggs, which increased 12%, Topline Research analyst Myesha Sohail said.

Core inflation, which excludes volatile food and energy components, edged up to 8.7% year-on-year in August from 8.4% in July.

The housing, water, electricity and gas category rose 0.55% during the month. While liquefied petroleum gas prices fell 1.31%, electricity charges increased 1.7%, mainly because of a higher fuel charges adjustment, while water costs rose 4.15%.

The fuel charges adjustment increased to PKR0.7503 per kilowatt-hour in August from PKR0.3364 per kilowatt-hour in July, contributing to the rise in electricity costs.

With annual inflation at about 11.2%, Pakistan’s real interest rate stood at approximately 0.4%, according to Topline Research’s calculations.

Topline expects average inflation for fiscal year 2026-27 to remain in the range of 8% to 8.5%, although the outlook will remain sensitive to international commodity prices, domestic energy costs and food-price movements.